The Manufacturers Association of Nigeria is urging the federal government to stop power firms from sending estimated bills to electricity consumers
| By Anayo Ezugwu | Jun 8, 2015 @ 01:00 GMT |
THE Manufacturers Association of Nigeria, MAN, is kicking against estimated bills which power firms send to electricity consumers in the country. MAN is also urging the incoming government to streamline electricity tariff to reflect the actual consumption by the industries instead of the current use of estimated bills. Frank Jacobs, president, MAN, at a media luncheon held at MAN’s house in Lagos, said “if the electricity tariff is streamlined, it will drive further improvement in power supply and create a special electricity tariff lines for heavy users of electricity like steel, cement and other strategic sub-sector.”
“Make it mandatory for DISCOs to procure prepaid meters from local manufacturers and distribute same to all customers to properly regularise electricity billing. Facilitate adequate local sourcing of LPFO, especially for supply at reasonable price to industries operating in areas without gas network” he said.
According to Jacobs, electricity generation in the first quarter of 2015 showed slight improvement as generation hovered around 4,000 MW per day, however, transmission and distribution of available electricity output were abysmal in the period due to long time of decayed infrastructure in the system. These scenarios contrast with the huge energy need of the industrial sector including manufacturing.
He said the promise of adequate and stable electricity for industrial production as embedded in the objectives of the power sector reform remains regrettably elusive. “Ironically, in spite of the poor energy situation in the country, the Nigerian Electricity Regulatory Committee, NERC, has maintained increase in electricity charges not considering its implication on the economy especially the productive sector. The most detrimental is the so called fixed electricity charges which stood astronomically across distribution zone with Kaduna at N580,600; Jos (N370,760); Yola (N358,331) and Abuja (N243,168) per month in MYTO 2.0 for D3 category” he said.
Manufacturers are faced with payment for electricity they did not consume. In spite of the current high tariff from NERC, industry expends huge funds on alternative energy sources for production and the implication of the development was increase in the average cost of production in the sector, which lowers the competitiveness of locally produced goods against imported close substitutes. He urged the incoming government to revisit the power sector reform so as to ease-out the current stagnation and make the sector functional.
MAN had in February this year warned that the new tariff order Multi Year Tariff Order (MYTO 2.1) which became effective in January was paralysing most companies in the country. They, therefore, threatened to shut down their factories if the situation continued.
Following this complaint lodged by MAN and other consumers, the NERC on Tuesday, March 17, reviewed the rates to be paid for electricity consumption in the country. NERC, after its consultation with various electricity consumer groups across the country, established that the skyrocketing increase in tariffs was informed by huge aggregate technical, commercial and collection, ATC&C, losses which are incurred by the electricity distribution companies and are subsequently passed through to consumers.
It therefore reviewed the assumptions in the Multi-Year Tariff Order (MYTO 2.1) and determined that henceforth, it would be inappropriate for distribution companies to transfer collection losses that they record and have control over to consumers.